Bookkeeper & Tax Accountant (CPA): Why You Need Both
BOOKKEEPER BRIDGES THE GAP
It can be very confusing when you hear bookkeeper and accountant used interchangeably but they are different and both essential to your business.
You don’t want the one-stop-shop when it comes to bookkeeping and filing your taxes. These are two different things. Just the way a doctor and a nurse are two different, but complementary roles, a bookkeeper and a tax accountant have different areas of expertise, but need each other. The bookkeeper bridges the gap between you and your tax accountant.
Work with the experts and then let the experts work together. A good bookkeeper saves money (tax accountant fees are rising because of the shortage of them). Your bookkeeper will communicate with your tax accountant and hand off clean, accurate books so the tax accountant can build on that work.
Keep in mind, if the same firm doing your taxes is doing your bookkeeping—there is a high chance of human error and this can create a conflict of interest. Think checks and balances.
complimentary roles
Bookkeeper’s role: Managing the business financials day-to-day so you can understand exactly what is coming in and going out of your business, equipping you to make strategic decisions that will increase profits.
Tax Accountant's role: Using the financial data prepared by the bookkeeper for tax planning, tax preparation, and tax strategy ensuring that you, as the business owner, are not overpaying or underpaying in taxes, and keeping you out of trouble with the IRS.
QUESTIONS TO ASK WHEN HIRING A BOOKKEEPER
1. Ask what software they use and why? Will you be charged for software?
2. How do they work with CPAs and tax preparers? At the end of the year, the bookkeeper finalizes reports to hand off to a CPA.
3. How many clients have they worked with in your industry? This can be an important question if certain aspects of your business are unique.
4. Ask what info they need from you? Will they need your answers on how to categorize expenses etc.? Will they need your bank statements?
5. What are their response times? Will there typically be a 24–48-hour (or earlier) response from your bookkeeping team?
6. Who will you be working with? Will you have your own, dedicated bookkeeper? A Success Team member or bookkeeper oversight? How does it work? How will they communicate? Email, text, phone, etc.?
7. When are reports finalized and delivered?
8. What other services do they provide? Know how you can grow with the support of the bookkeeping company. Ideally, you shouldn’t have to leave your bookkeeper in order to receive additional, growth-oriented services.
9. What will you be charged for and based on what?
QUESTIONS TO ASK WHEN HIRING A tax accountant
1. What is your philosophy in business? You need to have a relationship in which you can talk about things and grow with them.
2. What happens when I'm confused about something? How fast can I book an appointment with you? Some people are booked weeks in advance.
3. What happens when something goes wrong? Do you guarantee your work?
4. What’s the process when I get a letter in the mail for payroll, sales tax, bookkeeping or income tax? You will need real support around this.
5. Do you have anyone who checks your work before sending to the IRS?
Need to outsource you your bookkeeping? Get a free estimate today and let’s chat! We love supporting small business owners as they build a legacy.